VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/28/13 -- Africa Oil Corp. (TSX VENTURE: AOI)(OMX: AOI) ("Africa Oil", "the Company" or"AOC") is pleased to announce its financial and operating results for the three months ended March 31, 2013.
-- On the back of the successful exploration activities in Kenya during 2012, the Company, together with its partners, continues to ramp up its exploration program in Kenya and Ethiopia. Entering the year, two Tullow-Africa Oil joint venture rigs were operating in Kenya and one joint venture rig was operating in Ethiopia. A fourth Tullow-Africa Oil joint venture rig has been secured and is expected to commence testing and drilling operations in Kenya on Blocks 10BB and 13T during the third quarter of 2013. The Company, as operator, and its partner in Block 9 (Kenya) have secured a fifth rig, which will commence drilling operations in the third quarter of 2013. In addition, the Company and its partners in Block 7/8 (Ethiopia) have secured a sixth rig, which will commence drilling operations in June 2013. For a period, the Company will have 6 drilling rigs operating and expects to exit the year with 5 rigs operating in the region. The Company plans to drill 10 to 12 wells and perform up to 5 well tests across its exploration blocks during 2013.-- The Company and its partner on Block 13T, Tullow, conducted well testing operations at Twiga South-1, which resulted in a cumulative flow rate of 2,812 barrels of oil per day ("bopd") from three zones, despite being constrained by surface equipment. With optimized production equipment, the cumulative flow rate is anticipated to have increased to a cumulative rate of approximately 5,200 bopd. High quality 37 degree API waxy sweet crude flowed from all three zones in the Auwerwer formation with good quality reservoir sands encountered. The well was suspended as a potential future production well.-- The Company and its partner on Block 10BB, Tullow, are currently conducting tests on a series of six zones at the Ngamia-1 discovery. Ngamia-1 was drilled in 2012 but testing operations were postponed until appropriate artificial lift equipment was sourced to properly assess the accumulation. The first of these tests was in the Lower Lokhone formation where up to 43 meters of potential pay had previously been identified by logging and MDT sampling. The well flowed 281 barrels of 30 degree API oil per day from this zone. The remaining 5 tests are being conducted in the Auwerwer formation which are the highest quality reservoirs penetrated in the Ngamia well and which produced very well in the Twiga South-1 well. Results of these remaining Ngamia-1 tests are expected to be announced in June 2013.-- In the first quarter of 2013, the Company and its operating partners on Block 10A completed drilling the Paipai-1 exploration well. The Paipai-1 well tested a large four-way closed structure with Cretaceous-age sandstone targets at multiple depths. Paipai-1 spudded in September 2012 and completed drilling in the first quarter of 2013 to a total depth of 4,255 meters. Light hydrocarbons were encountered while drilling a 55 meter thick gross sandstone interval. Attempts to sample the reservoir fluid were unsuccessful and the hydrocarbons encountered while drilling were not recovered to surface. The Company and its partners were unable to test the well at the time due to the unavailability, in country, of testing equipment capable of handling the higher reservoir pressures encountered at this depth. As a result, the well has been temporarily suspended pending further data evaluation.-- The rig that drilled the Paipai-1 well in Block 10A has mobilized to the Lokichar Basin in Block 10BB to drill the Etuko prospect in the flank play where oil was discovered in 1992 by Shell at the Loperot-1 well. The Etuko-1 well spud in early May 2013 and results from the well are expected in July 2013. Should Etuko-1 be successful, there are a number of drill ready follow-up prospects on the same trend.-- The Company and its partners on the South Omo Block (Ethiopia) spudded the Sabisa-1 well in January 2013 and the well was drilled to a preliminary total depth of 1,810 meters. Hydrocarbon indications in sands beneath a thick claystone top seal have been recorded while drilling, but hole instability issues have required the drilling of a sidetrack to comprehensively log and sample these zones of interest. The sidetrack is underway and a result is expected in late May/early June.-- The Company and its joint operating partners on Blocks 7/8 (New Age operated) are planning to drill and test the El Kuran-3 appraisal well. A rig has been secured, the well site has been constructed and the well is expected to spud towards the end of June 2013. Should the well show encouragement, a multi-zone acid fracture stimulation well test is planned during 2013.-- The Company and its partner on Block 9 are currently planning to drill one exploration well in 2013. Block 9 is in the Cretaceous rift basin on trend with the South Sudan oil fields and the play concept was confirmed by the recent Paipai-1 well drilled in Block 10A. Two major prospects, Bahasi-1 and Sala-1, with large volume potential have been identified. The Company, as operator, and its partners in Block 9 have secured a rig to drill the Bahasi-1 exploration well. Site construction for Bahasi-1 commenced in May and the well is expected to spud in the third quarter of 2013.-- The Company continues to actively acquire, process and interpret 2D seismic over Blocks 10BA, 10BB, 12A, 13T and South Omo. In addition, the Company and its partner in Blocks 10BB and 13T will mobilize a 3D seismic crew to complete a 550 square kilometer 3D seismic survey over the Ngamia and Twiga structures later in 2013.-- In first quarter of 2013, the Company executed a PSA for the Rift Basin Area in Ethiopia. Located north of the South Omo Block, the Rift Basin Area covers 42,519 square kilometers. This block is on trend with highly prospective blocks in the Tertiary rift valley including the South Omo Block in Ethiopia, and Kenyan Blocks 10BA, 10BB, 13T, and 12A. The Company commenced acquiring a Full Tensor Gradiometry survey in May 2013 and will conduct an exhaustive environmental and social impact assessment over the block later in the year in preparation for a seismic program in 2014.-- Africa Oil ended the quarter in a strong financial position with cash of $237.1 million and working capital of $198.8 million.